Producer Prices in the Transition to a Common Currency

Niclas Andrén () and Lars Oxelheim

No 668, Working Paper Series from Research Institute of Industrial Economics

Abstract: We analyze producer price developments in the transition from a national exchange rate regime to a monetary union. The focus is on the European Economic and Monetary Union (EMU). Stylized facts witness about an exploding gaps in producer-price inflation during the years immediately following the completion of the EMU. Price convergence is found to be an important driver throughout the entire euro period (1999-2005), but with no significant differences in speed compared to the pre euro period. Productivity growth had its primary effect in the first years and effective exchange-rate changes in the later years of the euro period.

Keywords: Producer prices; Relative prices; Price convergence; Euro; Balassa-Samuelson (search for similar items in EconPapers)
JEL-codes: E31 E44 F15 F23 G34 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2006-09-22
New Economics Papers: this item is included in nep-cba, nep-eec, nep-fin, nep-fmk, nep-ifn, nep-mac and nep-mon
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0668

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